Pending home sales rose sharply in
October according to the Pending Home Sales Index (PHSI) released Thursday by
the National Association of Realtors® (NAR).
The index increased 5.2 percent to 104.8 from 99.6 in September and was
13.2 percent above the October 2011 index of 92.6. September's estimate was revised upward from
the 99.5 originally reported. October's
number was the highest for the index since an identical number was posted in March
2007 and is the 18th consecutive month in which the index has posted
an annual increase.
The PHSI is a forward-looking indicator based on signed contracts for home
purchases. The contracts are generally
expected to convert to home sales within one to two months.
NAR chief economist, said buyers are responding to favorable market
conditions. "We've had very good housing affordability conditions for
quite some time, but we're seeing more impact now from steady job creation, and
rising consumer confidence about home buying now that home prices have clearly
Two out of
four regions reported a monthly increase on a seasonally adjusted basis with
the Midwest up 15.6 percent while the South posted a more modest 5.5 percent
gain. The Northeast was down 0.1 percent
and the West 1.1 percent. All four
regions posted annual increases; the Northeast was up 13.3 percent, the Midwest
20.0 percent, the South 17.4 percent, and the West 0.9 percent.
there are clear regional patterns. "Contract activity surged in the
Midwest and is showing very healthy gains in the South, but was down slightly
in both the Northeast and West." He noted there were reasons for some of the
regional discrepancies, "The Northeast saw some impact from Hurricane Sandy,
but limited inventory in the West is keeping a lid on the market. All
regions are up from a year ago, with double-digit gains in every region but the
NAR's index is
based on a large national sample, typically representing about 20 percent of
transactions for existing-home sales. An index of 100 is equal to the
average level of contract activity during 2001, which was the first year to be
examined as well as the first of five consecutive record years for
existing-home sales; it coincides with a level that is historically healthy.